# Brinks Co: Form 10-Q for the period ended Jun 30, 2018

- Company: [Brinks Co](/companies/bco.md) (CIK 78890)
- Form: 10-Q
- Filed: 2018-07-25
- Accepted by EDGAR: Jul 25, 2018, 20:19 ET
- Period: 2018-06-30
- Accession: 0000078890-18-000033
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/78890/000007889018000033/bco0630201810-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/78890/000007889018000033/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2018-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2018-04-01 to 2018-06-30 | $849.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2018-01-01 to 2018-06-30 | $1.73bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2018-04-01 to 2018-06-30 | $666.8m | us-gaap:CostOfRevenue |
| Cost of revenue | 6 months, 2018-01-01 to 2018-06-30 | $1.36bn | us-gaap:CostOfRevenue |
| Operating income | 3 months, 2018-04-01 to 2018-06-30 | $61.7m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2018-01-01 to 2018-06-30 | $126.5m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2018-04-01 to 2018-06-30 | $15.8m | us-gaap:InterestExpense |
| Interest expense | 6 months, 2018-01-01 to 2018-06-30 | $30.8m | us-gaap:InterestExpense |
| Income tax | 3 months, 2018-04-01 to 2018-06-30 | $18.6m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2018-01-01 to 2018-06-30 | $30.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2018-04-01 to 2018-06-30 | −$107.9m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2018-01-01 to 2018-06-30 | −$85.6m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2018-04-01 to 2018-06-30 | −$2.11 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2018-01-01 to 2018-06-30 | −$1.68 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2018-04-01 to 2018-06-30 | −$2.11 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2018-01-01 to 2018-06-30 | −$1.68 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2018-04-01 to 2018-06-30 | 51,200,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2018-01-01 to 2018-06-30 | 51,000,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2018-01-01 to 2018-06-30 | $109.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2018-01-01 to 2018-06-30 | $73.3m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2018-01-01 to 2018-06-30 | $15.2m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2018-06-30 | $548.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2018-06-30 | $1.40bn | us-gaap:AssetsCurrent |
| Total assets | at 2018-06-30 | $2.87bn | us-gaap:Assets |
| Current liabilities | at 2018-06-30 | $779.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2018-06-30 | $2.63bn | us-gaap:Liabilities |
| Long-term debt | at 2018-06-30 | $1.13bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2018-06-30 | $53.3m | us-gaap:LongTermDebtCurrent |
| Short-term borrowings | at 2018-06-30 | $41.4m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2018-06-30 | $223.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 71,860 characters.

The Brink’s Company offers transportation and logistics management services for cash and valuables throughout the world. These services include:

- Cash-in-Transit (“CIT”) Services – armored vehicle transportation of valuables
- ATM Services – replenishing and maintaining customers’ automated teller machines; providing network infrastructure services
- Global Services – secure international transportation of valuables
- Cash Management Services
- Currency and coin counting and sorting; deposit preparation and reconciliations; other cash management services
- Safe and safe control device installation and servicing (including our patented CompuSafe® service)
- Vaulting services
- Check imaging services
- Payment Services – bill payment and processing services on behalf of utility companies and other billers at any of our Brink’s or Brink’s-operated payment locations in Brazil, Colombia, Panama, and Mexico and Brink’s Money™ general purpose reloadable prepaid cards and payroll cards in the U.S.
- Commercial Security Systems Services – design and installation of security systems in designated markets in Europe
- Guarding Services – protection of airports, offices, and certain other locations in Europe and Brazil with or without electronic surveillance, access control, fire prevention and highly trained patrolling personnel

We identify our operating segments based on how our chief operating decision maker (“CODM”) allocates resources, assesses performance and makes decisions. Our CODM is our President and Chief Executive Officer. Our CODM evaluates performance and allocates resources to each operating segment based on an operating profit or loss measure, excluding income and expenses not allocated to segments.

We have three operating segments:

- North America
- South America
- Rest of World.

### RESULTS OF OPERATIONS

### Consolidated Review

#### GAAP and Non-GAAP Financial Measures

We provide an analysis of our operations below on both a generally accepted accounting principles (“GAAP”) and non-GAAP basis. The purpose of the non-GAAP information is to report our operating profit, income from continuing operations and earnings per share without certain income and expense items that do not reflect the regular earnings of our operations. The non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We do not consider these items to be reflective of our core operating performance due to the variability of such items from period-to-period in terms of size, nature and significance. The non-GAAP adjustments used to reconcile our GAAP results are described on pages 40–41 and are reconciled to comparable GAAP measures on pages 47–49.

#### Definition of Organic Growth

Organic growth represents the change in revenues or operating profit between the current and prior period, excluding the effect of acquisitions and dispositions and changes in currency exchange rates. See definitions on page 38.

*(In millions, except for per share amounts)*

| GAAP | Three Months Ended June 30,% 2018 | 2017 | Change | Six Months Ended June 30,% 2018 | 2017 | Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenues | $849.7 | 805.9 | 5 | 1,728.8 | 1,594.3 | 8 |
| Cost of revenues | 666.8 | 628.9 | 6 | 1,360.4 | 1,239.2 | 10 |
| Selling, general and administrative expenses | 119.9 | 122.8 | (2) | 243.0 | 229.9 | 6 |
| Operating profit | 61.7 | 48.3 | 28 | 126.5 | 119.2 | 6 |
| Income (loss) from continuing operations(a) | (107.8) | 14.3 | unfav | (85.7) | 49.0 | unfav |
| Diluted EPS from continuing operations(a) | $(2.11) | 0.28 | unfav | (1.68) | 0.95 | unfav |
| Non-GAAP(b) |  |  |  |  |  |  |
| Non-GAAP revenues | $824.1 | 759.6 | 8 | 1,677.4 | 1,499.9 | 12 |
| Non-GAAP operating profit | 76.2 | 60.8 | 25 | 147.7 | 114.3 | 29 |
| Non-GAAP income from continuing operations(a) | 38.6 | 34.1 | 13 | 72.4 | 64.1 | 13 |
| Non-GAAP diluted EPS from continuing operations(a) | $0.74 | 0.66 | 12 | 1.39 | 1.24 | 12 |

(a) Amounts reported in this table are attributable to the shareholders of Brink’s and exclude earnings related to noncontrolling interests.

(b) Non-GAAP results are reconciled to the applicable GAAP results on pages 47–49.

#### Deconsolidation of Venezuela

Due to political and economic conditions in Venezuela, in the second quarter of 2018, we determined that we no longer met the accounting criteria for control over our Venezuelan operations. We expect these conditions to continue for the foreseeable future. Consequently, we began reporting the results of our investment in our Venezuelan subsidiaries using the cost method of accounting. We determined the fair value of our cost method investment in, and receivables from, our Venezuelan subsidiaries to be insignificant based on our expectations of dividend payments and settlements of such receivables in future periods. As a result, we deconsolidated our Venezuela subsidiaries and recognized a pretax loss of $126.7 million in the second quarter of 2018. This loss is excluded from our non-GAAP results.

### GAAP Basis

### Analysis of Consolidated Results: Second Quarter 2018 versus Second Quarter 2017

***Consolidated Revenues*** Revenues increased $43.8 million as organic growth in Venezuela ($1,657.6 million), South America ($40.5 million), North America ($15.7 million), and Rest of World ($3.3 million) and the favorable impact of acquisitions ($36.2 million) were partially offset by unfavorable changes in currency exchange rates ($1,709.5 million). A significant portion of the reduction in revenues from currency exchange rates relates to the strengthening of the U.S. dollar against the Venezuela bolivar ($1,678.3 million). Revenues increased on an organic basis due mainly to higher average selling prices in Venezuela and Argentina (including the effects of inflation) and organic revenue growth in Brazil and Mexico from volume growth and price increases. See above for our definition of “organic.”

***Consolidated Costs and Expenses*** Cost of revenues increased 6% to $666.8 million primarily due to the impact of acquisitions and inflation-based organic increases in labor and other operational costs, partially offset by changes in currency exchange rates. Selling, general and administrative costs decreased 2% to $119.9 million due primarily to changes in currency exchange rates, partially offset by organic increases in compensation costs and the impact of acquisitions.

***Consolidated Operating Profit*** We believe our current operating profit margin in our North America segment is lower than our other segments and our competitors as our vehicle and labor expenses are too high. We are working to increase our operating profit margin by implementing productivity improvements aimed at reducing vehicle and labor expenses and by selling higher valued services. We expect our North America segment operating profit margin will be more comparable to our Rest of World segment in the future, but will not achieve the same level as our South America segment, where profit margins are higher for us and our competitors due to market conditions. Operating profit increased $13.4 million due mainly to:

- organic increases in Venezuela ($590.1 million), South America ($15.8 million) and North America ($10.0 million), and
- the favorable operating impact of business acquisitions ($8.3 million), excluding intangible asset amortization and acquisition-related severance charges,

partially offset by:

- unfavorable changes in currency exchange rates ($602.7 million), including the effects of Venezuela and South America devaluations, and
- higher costs related to business acquisitions and dispositions ($5.0 million), primarily from the impact of intangible asset amortization and acquisition-related severance charges.

***Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Income from continuing operations attributable to Brink’s shareholders in 2018 decreased $122.1 million to negative $107.8 million primarily due to the loss on deconsolidation of Venezuela operations ($126.7 million), higher interest expense ($9.8 million), and slightly higher income tax expense ($1.3 million) and income attributable to noncontrolling interests ($1.0 million), partially offset by the operating profit increase mentioned above and lower interest and other expense ($3.3 million). Earnings per share from continuing operations was negative $2.11, down from $0.28 in the second quarter of 2017.

### Analysis of Consolidated Results: First Half 2018 versus First Half 2017

***Consolidated Revenues*** Revenues increased $134.5 million as organic growth in Venezuela ($1,995.7 million), South America ($76.2 million), North America ($20.9 million), and Rest of World ($7.1 million) and the favorable impact of acquisitions ($87.1 million) were partially offset by unfavorable changes in currency exchange rates ($2,052.5 million). A significant portion of the reduction in revenues from currency exchange rates relates to the strengthening of the U.S. dollar against the Venezuela bolivar ($2,038.7 million). Revenues increased on an organic basis due mainly to higher average selling prices in Venezuela and Argentina (including the effects of inflation) and organic revenue growth in Brazil and Mexico from volume growth and price increases. See page 35 for our definition of “organic.”

***Consolidated Costs and Expenses*** Cost of revenues increased 10% to $1,360.4 million primarily due to the impact of acquisitions and inflation-based organic increases in labor and other operational costs, partially offset by changes in currency exchange rates. Selling, general and administrative costs increased 6% to $243.0 million due primarily to organic increases in compensation costs and the impact of acquisitions, partially offset by changes in currency exchange rates.

***Consolidated Operating Profit*** We believe our current operating profit margin in our North America segment is lower than our other segments and our competitors as our vehicle and labor expenses are too high. We are working to increase our operating profit margin by implementing productivity improvements aimed at reducing vehicle and labor expenses and by selling higher valued services. We expect our North America segment operating profit margin will be more comparable to our Rest of World segment in the future, but will not achieve the same level as our South America segment, where profit margins are higher for us and our competitors due to market conditions.

Operating profit increased $7.3 million due mainly to:

- organic increases in Venezuela ($581.4 million), South America ($32.1 million) and North America ($19.2 million), and
- the favorable operating impact of business acquisitions ($17.3 million), excluding intangible asset amortization and acquisition-related severance charges,

partially offset by:

- unfavorable changes in currency exchange rates ($615.4 million), including the effects of Venezuela and South America devaluations,
- higher costs related to business acquisitions and dispositions ($11.9 million), primarily from the impact of intangible asset amortization and acquisition-related severance charges, and
- higher corporate expenses ($11.1 million on an organic basis) primarily due to higher security-related costs.

***Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Income from continuing operations attributable to Brink’s shareholders in 2018 decreased $134.7 million to negative $85.7 million primarily due to the loss on deconsolidation of Venezuela operations ($126.7 million), and higher interest expense ($20.0 million), partially offset by the operating profit increase mentioned above, lower interest and other expense ($1.4 million), lower income tax expense ($1.7 million) and lower income attributable to noncontrolling interests ($1.6 million). Earnings per share from continuing operations was negative $1.68, down from $0.95 in the first half of 2017.

### Non-GAAP Basis

### Analysis of Consolidated Results: Second Quarter 2018 versus Second Quarter 2017

***Non-GAAP Consolidated Revenues*** Non-GAAP revenues increased $64.5 million as the favorable impact of acquisitions ($36.2 million) and organic growth in South America ($40.5 million), North America ($15.7 million), and Rest of World ($3.3 million) were offset by the unfavorable impact of currency exchange rates ($31.2 million). Non-GAAP revenues increased 8% on an organic basis due mainly to higher average selling prices in Argentina (including the effects of inflation) and organic revenue growth in Brazil and Mexico from volume growth and price increases. The unfavorable currency impact was driven by the Argentine peso and Brazilian real and was partially offset by the favorable impact of the euro. See page 35 for our definition of “organic.”

***Non-GAAP Consolidated Operating Profit*** Non-GAAP operating profit increased $15.4 million due mainly to:

- organic increases in South America ($15.8 million) and North America ($10.0 million), and
- the favorable operating impact of business acquisitions ($8.3 million),

partially offset by:

- unfavorable changes in currency exchange rates ($16.1 million).

***Non-GAAP Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Non-GAAP income from continuing operations attributable to Brink’s shareholders in 2018 increased $4.5 million to $38.6 million due to the operating profit increase mentioned above and higher interest and other income ($3.9 million), partially offset by higher interest expense ($9.5 million) and higher income tax expense ($5.2 million). Earnings per share from continuing operations was $0.74, up from $0.66 in the second quarter of 2017.

### Analysis of Consolidated Results: First Half 2018 versus First Half 2017

***Non-GAAP Consolidated Revenues*** Non-GAAP revenues increased $177.5 million as the favorable impact of acquisitions ($87.1 million) and organic growth in South America ($76.2 million), North America ($20.9 million), and Rest of World ($7.1 million) were offset by the unfavorable impact of currency exchange rates ($13.8 million). Non-GAAP revenues increased 7% on an organic basis due mainly to higher average selling prices in Argentina (including the effects of inflation) and organic revenue growth in Brazil and Mexico from volume growth and price increases. The unfavorable currency impact was driven by the Argentine peso and Brazilian real and was partially offset by the favorable impact of the euro. See page 35 for our definition of “organic.”

***Non-GAAP Consolidated Operating Profit*** Non-GAAP operating profit increased $33.4 million due mainly to:

- organic increases in South America ($32.1 million) and North America ($19.2 million), and
- the favorable operating impact of business acquisitions ($17.3 million),

partially offset by:

- unfavorable changes in currency exchange rates ($19.8 million), and
- higher corporate expenses ($11.1 million on an organic basis) due to higher security-related costs.

***Non-GAAP Consolidated Income from Continuing Operations Attributable to Brink’s and Related Per Share Amounts*** Non-GAAP income from continuing operations attributable to Brink’s shareholders in 2018 increased $8.3 million to $72.4 million due to the operating profit increase mentioned above and higher interest and other income ($5.4 million), partially offset by higher interest expense ($19.5 million) and higher income tax expense ($10.1 million). Earnings per share from continuing operations was $1.39, up from $1.24 in the first half of 2017.

### Revenues and Operating Profit by Segment: Second Quarter 2018 versus Second Quarter 2017

*(In millions)*

| Revenues: | 2Q'17 | Organic Change | Acquisitions / Dispositions(a) | Currency(b) | 2Q'18 | % Change Total | Organic |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | $311.0 | 15.7 | — | (2.7) | **324.0** | 4 | 5 |
| South America | 204.6 | 40.5 | 30.3 | (42.1) | **233.3** | 14 | 20 |
| Rest of World | 244.0 | 3.3 | 5.9 | 13.6 | **266.8** | 9 | 1 |
| **Segment revenues(e)** | 759.6 | 59.5 | 36.2 | (31.2) | **824.1** | 8 | 8 |
| Other items not allocated to segments(d) | 46.3 | 1,657.6 | — | (1,678.3) | **25.6** | (45) | fav |
| **Revenues - GAAP** | $805.9 | 1,717.1 | 36.2 | (1,709.5) | **849.7** | 5 | fav |
| **Operating profit:** |  |  |  |  |  |  |  |
| North America | $16.8 | 10.0 | — | (0.7) | **26.1** | 55 | 60 |
| South America | 36.4 | 15.8 | 6.9 | (13.0) | **46.1** | 27 | 43 |
| Rest of World | 25.4 | (1.4) | 1.4 | 0.8 | **26.2** | 3 | (6) |
| **Segment operating profit** | 78.6 | 24.4 | 8.3 | (12.9) | **98.4** | 25 | 31 |
| Corporate(c) | (17.8) | (1.2) | — | (3.2) | **(22.2)** | 25 | 7 |
| **Operating profit - non-GAAP** | 60.8 | 23.2 | 8.3 | (16.1) | **76.2** | 25 | 38 |
| Other items not allocated to segments(d) | (12.5) | 589.3 | (4.7) | (586.6) | **(14.5)** | 16 | fav |
| **Operating profit - GAAP** | $48.3 | 612.5 | 3.6 | (602.7) | **61.7** | 28 | fav |

Amounts may not add due to rounding.

(a) Non-GAAP amounts include the impact of prior year comparable period results for acquired and disposed businesses. GAAP results also include the impact of acquisition-related intangible amortization, restructuring and other charges, and disposition-related gains/losses.

(b) The amounts in the “Currency” column consist of the effects of Venezuela devaluations and the sum of monthly currency changes. Monthly currency changes represent the accumulation throughout the year of the impact on current period results of changes in foreign currency rates from the prior year period.

(c) Corporate expenses are not allocated to segment results. Corporate expenses include salaries and other costs to manage the global business and to perform activities required by public companies.

(d) See pages 40–41 for more information.

(e) Segment revenues equal our total reported non-GAAP revenues.

### Analysis of Segment Results: Second Quarter 2018 versus Second Quarter 2017

### North America

Revenues increased 4% ($13.0 million) primarily due to 5% organic growth ($15.7 million) driven by price and volume growth in Mexico and price increases in the U.S. Operating profit increased $9.3 million primarily due to organic growth in Mexico and the U.S. Organic profit growth in Mexico was driven by price increases, higher volumes and labor-related productivity improvements. Organic profit growth in the U.S. was driven by price increases and lower labor costs and other productivity improvements.

### South America

Revenues increased 14% ($28.7 million) primarily due to the favorable impact of acquisitions ($30.3 million) and 20% organic growth ($40.5 million), partially offset by the unfavorable impact of currency exchange rates ($42.1 million) mostly from the Argentine peso and Brazilian real. The organic growth was driven by inflation-based price increases in Argentina and price and volume growth in Brazil. Operating profit increased 27% ($9.7 million) driven by organic revenue growth in Argentina and Brazil and the favorable impact of acquisitions ($6.9 million), partially offset by unfavorable currency ($13.0 million) driven by the Argentine peso.

### Rest of World

Revenues increased 9% ($22.8 million) due to the favorable impact of currency exchange rates ($13.6 million), primarily from the euro, the favorable impact of acquisitions and dispositions ($5.9 million) and organic growth ($3.3 million). The organic revenue growth was driven by Israel and Greece, partially offset by a decrease in France due to pricing and volume pressure. Operating profit increased 3% ($0.8 million) due to the favorable impact of acquisitions and dispositions ($1.4 million) and currency ($0.8 million), partially offset by an organic decrease ($1.4 million) due primarily to France.

### Revenues and Operating Profit by Segment: First Half 2018 versus First Half 2017

*(In millions)*

| Revenues: | YTD '17 | Organic Change | Acquisitions / Dispositions(a) | Currency(b) | YTD '18 | % Change Total | Organic |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | $615.6 | 20.9 | 1.9 | 5.7 | **644.1** | 5 | 3 |
| South America | 406.8 | 76.2 | 66.9 | (61.8) | **488.1** | 20 | 19 |
| Rest of World | 477.5 | 7.1 | 18.3 | 42.3 | **545.2** | 14 | 1 |
| **Segment revenues(e)** | 1,499.9 | 104.2 | 87.1 | (13.8) | **1,677.4** | 12 | 7 |
| Other items not allocated to segments(d) | 94.4 | 1,995.7 | — | (2,038.7) | **51.4** | (46) | fav |
| **Revenues - GAAP** | $1,594.3 | 2,099.9 | 87.1 | (2,052.5) | **1,728.8** | 8 | fav |
| **Operating profit:** |  |  |  |  |  |  |  |
| North America | $27.0 | 19.2 | 0.3 | 0.2 | **46.7** | 73 | 71 |
| South America | 75.6 | 32.1 | 14.2 | (20.2) | **101.7** | 35 | 42 |
| Rest of World | 50.8 | (4.3) | 2.8 | 2.5 | **51.8** | 2 | (8) |
| **Segment operating profit** | 153.4 | 47.0 | 17.3 | (17.5) | **200.2** | 31 | 31 |
| Corporate(c) | (39.1) | (11.1) | — | (2.3) | **(52.5)** | 34 | 28 |
| **Operating profit - non-GAAP** | 114.3 | 35.9 | 17.3 | (19.8) | **147.7** | 29 | 31 |
| Other items not allocated to segments(d) | 4.9 | 580.8 | (11.3) | (595.6) | **(21.2)** | unfav | fav |
| **Operating profit - GAAP** | $119.2 | 616.7 | 6.0 | (615.4) | **126.5** | 6 | fav |

Amounts may not add due to rounding.

See page 38 for footnote explanations.

### Analysis of Segment Results: First Half 2018 versus First Half 2017

### North America

Revenues increased 5% ($28.5 million) driven by organic growth of 3% ($20.9 million), the favorable impact of currency exchange rates ($5.7 million) primarily from the Canadian dollar and Mexican peso, and the favorable impact of acquisitions ($1.9 million). Organic revenue growth increased from price and volume growth in Mexico. Operating profit increased $19.7 million primarily due to organic growth in Mexico and the U.S. Organic profit growth in Mexico was driven by price increases, higher volumes and labor-related productivity improvements. Organic profit growth in the U.S. was driven by price increases and lower labor costs and other productivity improvements.

### South America

Revenues increased 20% ($81.3 million) primarily due to 19% organic growth ($76.2 million), the favorable impact of acquisitions ($66.9 million), partially offset by the unfavorable impact of currency exchange rates ($61.8 million) mostly from the Argentine peso and Brazilian real. The organic growth was driven by inflation-based price increases in Argentina and price and volume growth in Brazil. Operating profit increased 35% ($26.1 million) driven by organic revenue growth in Argentina and Brazil and the favorable impact of acquisitions ($14.2 million), partially offset by unfavorable currency ($20.2 million) driven by the Argentine peso.

### Rest of World

Revenues increased 14% ($67.7 million) due to the favorable impact of currency exchange rates ($42.3 million), primarily from the euro, the favorable impact of acquisitions and dispositions ($18.3 million) and organic growth ($7.1 million). The organic revenue growth was driven by Israel and Greece, partially offset by a decrease in France due to pricing and volume pressure. Operating profit increased 2% ($1.0 million) due to the favorable impact of acquisitions and dispositions ($2.8 million) and currency ($2.5 million), partially offset by an organic decrease ($4.3 million) due primarily to France.

### Income and Expense Not Allocated to Segments

### Corporate Expenses

*(In millions)*

|  | Three Months Ended June 30,% 2018 | 2017 | change | Six Months Ended June 30,% 2018 | 2017 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| General, administrative and other expenses | $(20.9) | (18.3) | 14 | $(52.0) | (37.5) | 39 |
| Foreign currency transaction gains (losses) | (1.7) | 1.4 | unfav | (2.2) | 0.2 | unfav |
| Reconciliation of segment policies to GAAP | 0.4 | (0.9) | fav | 1.7 | (1.8) | fav |
| Corporate expenses | $(22.2) | (17.8) | 25 | $(52.5) | (39.1) | 34 |

Second quarter 2018 corporate expenses were up $4.4 million versus the prior year quarter and first half 2018 corporate expenses were up $13.4 million versus the prior year period. The increase in both periods was primarily driven by currency transaction losses in the current year period versus gains in the prior year period as well as higher security losses. Corporate expenses include former non-segment and regional management costs, currency transaction gains and losses, and costs related to global initiatives.

### Other Items Not Allocated to Segments

*(In millions)*

| Revenues: | Three Months Ended June 30,% 2018 | 2017 | change | Six Months Ended June 30,% 2018 | 2017 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Venezuela operations | $25.6 | 46.3 | (45) | $51.4 | 94.4 | (46) |
| Revenues | $25.6 | 46.3 | (45) | 51.4 | 94.4 | (46) |
| Operating profit: |  |  |  |  |  |  |
| Venezuela operations | $(1.2) | (4.5) | (73) | 2.3 | 16.6 | (86) |
| Reorganization and Restructuring | (4.5) | (5.6) | (20) | (8.2) | (9.7) | (15) |
| Acquisitions and dispositions | (7.4) | (2.4) | unfav | (13.9) | (2.0) | unfav |
| Reporting compliance | (1.4) | — | unfav | (1.4) | — | unfav |
| Operating profit | $(14.5) | (12.5) | 16 | $(21.2) | 4.9 | unfav |

The impact of other items not allocated to segments was a loss of $14.5 million in the second quarter of 2018 versus the prior year period loss of $12.5 million. The change was primarily due to higher acquisition-related charges in the current year quarter partially offset by a reduction in losses from Venezuela operations.

The impact of other items not allocated to segments was a loss of $21.2 million in the first half of 2018 versus the prior year period profit of $4.9 million. The change was primarily due to lower profits from our Venezuela operations and higher acquisition-related charges in the current year period.

**Venezuela operations** Prior to the deconsolidation of our Venezuelan subsidiaries effective June 30, 2018 (see Note 1 of the condensed consolidated financial statements), we excluded from our segment results all of our Venezuela operating results due to the Venezuelan government's restrictions that have prevented us from repatriating funds. In light of these unique circumstances, our operations in Venezuela are largely independent of the rest of our global operations. As a result, the Chief Executive Officer, the Company's Chief Operating Decision maker ("CODM"), has assessed segment performance and has made resource decisions by segment excluding Venezuela operating results. Additionally, management believes excluding Venezuela from segment results has made it possible to more effectively evaluate the company’s performance between periods. Prior to deconsolidation,Venezuela operating results include remeasurement gains and losses on monetary assets and liabilities related to currency devaluations. We recognized remeasurement gains of $2.2 million in the first six months of 2018 versus remeasurement losses of $8.4 million in the first six months of 2017.

Factors considered by management in excluding Venezuela results include:

- Continued inability to repatriate cash to redeploy to other operations or dividend to shareholders
- Highly inflationary environment
- Previous fixed exchange rate policy
- Continued currency devaluations and
- Difficulty raising prices and controlling costs

### Reorganization and Restructuring

#### 2016 Restructuring

In the fourth quarter of 2016, management implemented restructuring actions across our global business operations and our corporate functions. As a result of these actions, we recognized $18.1 million in related 2016 costs. We recognized an additional $17.3 million in 2017 under this restructuring for additional costs related to severance, asset-related adjustments, a benefit program termination and lease terminations. We recognized an additional $6.0 million in the first six months of 2018 under this program for additional asset related and severance costs. Severance actions are expected to reduce our global workforce by 800 to 900 positions and result in approximately $20 million in annualized cost savings when this restructuring is finalized. We expect to incur additional costs between $2 and $4 million in future periods, primarily severance costs.

#### Other Restructurings

Management routinely implements restructuring actions in targeted sections of our business. As a result of these actions, we recognized $2.2 million in the first six months of 2018, primarily severance costs. When completed, the current restructuring actions will reduce our workforce by 400 to 500 positions and result in approximately $7 million in annualized cost savings. For the current restructuring actions, we expect to incur additional costs between $2 and $4 million in future periods. These estimates will be updated as management targets additional sections of our business.

Due to the unique circumstances around these charges, they have not been allocated to segment results and are excluded from non-GAAP results. Charges related to the employees, assets, leases and contracts impacted by these restructuring actions were excluded from the segments and corporate expenses as shown in the table below.

*(In millions)*

| Reportable Segments: | Three Months Ended June 30,% 2018 | 2017 | change | Six Months Ended June 30,% 2018 | 2017 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| North America | $(0.1) | (1.6) | (94) | $(0.6) | (2.7) | (78) |
| South America | (0.2) | (0.4) | (50) | (1.0) | (2.8) | (64) |
| Rest of World | (4.2) | (1.1) | unfav | (6.6) | (1.6) | unfav |
| Total reportable segments | (4.5) | (3.1) | 45 | (8.2) | (7.1) | 15 |
| Corporate items | — | (2.5) | (100) | — | (2.6) | (100) |
| Total | $(4.5) | (5.6) | (20) | $(8.2) | (9.7) | (15) |

**Acquisitions and dispositions** Certain acquisition and disposition items that are not considered part of the ongoing activities of the business and are special in nature are consistently excluded from non-GAAP results. These items are described below:

#### 2018 Acquisitions and Dispositions

- Amortization expense for acquisition-related intangible assets was $7.2 million in the first six months of 2018.
- Severance costs related to our 2017 acquisitions in Argentina, France and Brazil were $3.3 million in the first six months of 2018.
- Transaction costs related to business acquisitions were $2.1 million in the first six months of 2018.

#### 2017 Acquisitions and Dispositions

- We recognized $0.8 million in gains in the first quarter of 2017 related to the liquidation of our former cash-in-transit operation in Puerto Rico.
- Amortization expense for acquisition-related intangible assets was $1.7 million in the first six months of 2017.
- Transaction costs related to business acquisitions were $0.7 million in the first six months of 2017.

**Reporting compliance** Certain third party costs incurred related to the mitigation of material weaknesses ($0.5 million in the second quarter of 2018) and the implementation and adoption of ASU 2016-02, the new lease accounting standard effective for us January 1, 2019 ($0.9 million in the second quarter of 2018), are excluded from non-GAAP results.

### Foreign Operations

We currently serve customers in more than 100 countries, including 41 countries where we operate subsidiaries.

We are subject to risks customarily associated with doing business in foreign countries, including labor and economic conditions, political instability, controls on repatriation of earnings and capital, nationalization, expropriation and other forms of restrictive action by local governments. Changes in the political or economic environments in the countries in which we operate could have a material adverse effect on our business, financial condition and results of operations. The future effects, if any, of these risks are unknown.

Our international operations conduct a majority of their business in local currencies. Because our financial results are reported in U.S. dollars, they are affected by changes in the value of various local currencies in relation to the U.S. dollar. Recent strengthening of the U.S. dollar has reduced our reported dollar revenues and operating profit, which may continue in 2018.

Changes in exchange rates may also affect transactions that are denominated in currencies other than the functional currency. From time to time, we use foreign currency forward and swap contracts to hedge transactional risks associated with foreign currencies. At June 30, 2018, the notional value of our shorter term outstanding foreign currency forward and swap contracts was $156.5 million with average contract maturities of approximately one month. These shorter term foreign currency forward and swap contracts primarily offset exposures in the euro and the British pound. Additionally, these shorter term contracts are not designated as hedges for accounting purposes, and accordingly, changes in their fair value are recorded immediately in earnings. We recognized gains of $3.4 million on these contracts in the first six months of 2018. At June 30, 2018, the fair value of these shorter term foreign currency contracts was a net liability of $1.2 million.

See Note 1 to the condensed consolidated financial statements for a description of government currency processes and restrictions in Venezuela, the effect on our operations, and how we account for currency remeasurement for our Venezuelan and Argentine subsidiaries.

### Other Operating Income (Expense)

Other operating income (expense) includes amounts included in segment results as well as income and expense not allocated to segments.

*(In millions)*

| Foreign currency items: | Three Months Ended June 30,% 2018 | 2017 | change | Six Months Ended June 30,% 2018 | 2017 | change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Transaction gains (losses) | $(7.7) | (7.8) | (1) | $(3.3) | (10.0) | (67) |
| Foreign currency derivative instrument gains (losses) | 5.5 | 1.2 | fav | 3.4 | 1.9 | 79 |
| Gains on sale of property and other assets | 0.1 | 0.6 | (83) | 0.5 | 0.8 | (38) |
| Impairment losses | (0.9) | (0.6) | 50 | (2.7) | (1.0) | unfav |
| Share in earnings of equity affiliates | 0.3 | — | fav | 1.4 | 0.1 | fav |
| Royalty income | 1.3 | 0.4 | fav | 1.8 | 1.0 | 80 |
| Other | 0.1 | 0.3 | (67) | — | 1.2 | (100) |
| Other operating income (expense) | $(1.3) | (5.9) | (78) | $1.1 | (6.0) | fav |

Other operating expense was $1.3 million in the second quarter of 2018 versus $5.9 million in the prior year period. The decrease from the prior year quarter was primarily due to higher gains from foreign currency derivative instruments in the second quarter of 2018.

Other operating income was $1.1 million in the first half of 2018 versus $6.0 million of expense in the prior year period. The change was primarily related to lower foreign currency transaction losses in the first half of 2018 as compared to the prior year period.

### Nonoperating Income and Expense

### Interest expense

*(In millions)*

|  | Three Months Ended June 30,% 2018 | 2017 | change | Six Months Ended June 30,% 2018 | 2017 | change |
| --- | ---: | ---: | --- | ---: | ---: | --- |
| Interest expense | $15.8 | 6.0 | unfav | $30.8 | 10.8 | unfav |

Interest expense was higher in the second quarter of 2018 compared to the prior year period primarily due to higher borrowing levels due to business acquisitions.

Interest expense was higher in the first half of 2018 compared to the prior year period primarily due to higher borrowing levels due to business acquisitions.

### Loss on deconsolidation of Venezuela operations

*(In millions)*

|  | Three Months Ended June 30,% 2018 | 2017 | change | Six Months Ended June 30,% 2018 | 2017 | change |
| --- | ---: | ---: | --- | ---: | ---: | --- |
| Loss on deconsolidation of Venezuela operations | $126.7 | — | unfav | $126.7 | — | unfav |

See Note 1 to the condensed consolidated financial statements for more information about the loss on deconsolidation of our Venezuelan operations.

### Interest and other income (expense)

*(In millions)*

|  | Three Months Ended June 30,% 2018 | 2017 | change | Six Months Ended June 30,% 2018 | 2017 | change |
| --- | ---: | ---: | --- | ---: | ---: | --- |
| Interest income | $2.1 | 0.9 | fav | $4.1 | 1.6 | fav |
| Gain on equity securities | 1.5 | 0.2 | fav | 1.5 | 0.2 | fav |
| Foreign currency transaction losses(a) | (12.6) | — | unfav | (15.5) | — | unfav |
| Derivative instruments | — | (0.1) | (100) | — | (0.1) | (100) |
| Retirement benefit cost other than service cost | (10.0) | (12.1) | (17) | (21.7) | (23.7) | (8) |
| Gain on a disposition of a subsidiary(b) | 10.3 | — | fav | 10.3 | — | fav |
| Other | 0.6 | (0.3) | fav | 0.1 | (0.6) | fav |
| Interest and other income (expense) | $(8.1) | (11.4) | (29) | $(21.2) | (22.6) | (6) |

(a) Currency transaction losses incurred by Brink's Argentina related to its U.S. dollar-denominated payables to the sellers of Maco Transporatadora and Maco Litoral.

(b) Gain on the sale of our former French airport security services subsidiary in the second quarter of 2018.

### Income Taxes

| Continuing operations | Three Months Ended June 30, 2018 | 2017 | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| Provision for income taxes (in millions) | $18.6 | 17.3 | $30.0 | 31.7 |
| Effective tax rate | (20.9%) | 56.0% | (57.5%) | 36.9% |

#### Tax Reform

On December 22, 2017, the Tax Reform Act was enacted into law. The Tax Reform Act included a reduction in the federal tax rate for corporations from 35% to 21% as of January 1, 2018, a one-time transition tax on the cumulative undistributed earnings of foreign subsidiaries as of December 31, 2017, a repeal of the corporate alternative minimum tax, and more extensive limitations on deductibility of performance-based compensation for named executive officers. Other provisions effective as of January 1, 2018, which could materially impact the Company in the near-term, included the creation of a new U.S. minimum tax on foreign earnings called the Global Intangible Low-Taxed Income (“GILTI”) and limitations on the deductibility of interest expense.

Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Reform Act, the Company recorded provisional amounts as of December 31, 2017, in accordance with Staff Accounting Bulletin No. 118 (“SAB 118”). We recorded a provisional one-time non-cash charge of $92 million in the fourth quarter of 2017 to remeasure the deferred tax assets for the new rate and for other legislative changes. We do not expect a U.S. federal current tax liability for the transition tax due to our high-tax foreign income, but we recorded a provisional $31.1 million foreign tax credit offset with a full valuation allowance related to the transition tax. We did not record a current state tax liability related to the transition tax in accordance with the interpretation of existing state laws and the provisional estimates. The Company has not yet adopted an accounting policy related to the provision of deferred taxes related to GILTI. We did not change our assertion on the determination of which subsidiaries that we consider to be permanently invested and for which we do not expect to repatriate to the U.S. as a result of the Tax Reform Act. We will continue to collect and analyze data, including the undistributed earnings of foreign subsidiaries and related taxes, interpret the Tax Reform Act and apply the additional guidance and legislative changes to be issued by the U.S. federal and state authorities and may be required to make adjustments to these provisional amounts. We have not recorded any changes to the 2017 provisional amount in the first six months of 2018 and will complete the 2017 accounting for the Tax Reform Act by the end of 2018 in accordance with SAB 118.

#### 2018 Compared to U.S. Statutory Rate

The effective income tax rate on continuing operations in the first six months of 2018 was negative primarily due to the impact of Venezuela’s earnings and the related tax expense, including the largely nondeductible loss on the deconsolidation of the Venezuela operations. The items that cause the rate to be higher than the U.S. statutory rate include the geographical mix of earnings, the seasonality of book losses for which no tax benefit can be recorded, nondeductible expenses in Mexico, taxes on cross border payments and the characterization of a French business tax as an income tax, partially offset by the significant tax benefits related to the distribution of share-based payments and a French income tax credit.

#### 2017 Compared to U.S. Statutory Rate

The effective income tax rate on continuing operations in the first six months of 2017 was greater than the 35% U.S. statutory tax rate primarily due to the impact of Venezuela’s earnings and related tax expense, including the nondeductible expenses resulting from the currency devaluation, partially offset by the significant tax benefits related to the distribution of share-based payments. The other items that cause the rate to be higher than the U.S. statutory rate include the seasonality of book losses for which no tax benefit can be recorded, nondeductible expenses in Mexico, taxes on cross border payments and the characterization of a French business tax as an income tax, partially offset by the geographical mix of earnings and a French income tax credit.

#### Deferred Tax Assets

Deferred tax assets are future tax deductions that result primarily from the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes. At December 31, 2017, we had $173 million of U.S. deferred tax assets, net of valuation allowances, primarily related to our retirement plan obligations. These future tax deductions may not be realized if tax rules change in the future, if forecasted U.S. operational results are not realized or if any other U.S. projected future taxable income is insufficient. Consequently, not realizing our U.S. deferred tax assets may significantly and materially affect our financial condition, results of operations and cash flows.

#### Effective Tax Rate

Our effective tax rate may fluctuate materially from these estimates due to changes in permanent book-tax differences, changes in the expected amount and geographical mix of earnings, changes in current or deferred taxes due to legislative changes, changes in valuation allowances or accruals for contingencies, changes in distributions of share-based payments, changes in guidance and additional legislative changes related to the Tax Reform Act, and other factors.

### Noncontrolling Interests

*(In millions)*

|  | Three Months Ended June 30,% 2018 | 2017 | change | Six Months Ended June 30,% 2018 | 2017 | change |
| --- | ---: | ---: | --- | ---: | ---: | ---: |
| Net income (loss) attributable to noncontrolling interests | $0.3 | (0.7) | unfav | $3.5 | 5.1 | (31) |

The change from $0.7 million net loss attributable to noncontrolling interests in the second quarter of 2017 to $0.3 million of net income attributable to noncontrolling interests in the second quarter of 2018 was primarily due to higher operating results from our Venezuelan subsidiaries. The change from $5.1 million net income attributable to noncontrolling interests in the first half of 2017 to $3.5 million of net income attributable to noncontrolling interests in the first half of 2018 was primarily due to lower operating results from our Venezuelan subsidiaries.

See Note 1 to the condensed consolidated financial statements for more information about the currency devaluations of our Venezuelan subsidiaries and lower currency remeasurement charges from devaluation of Venezuelan currency.

### Non-GAAP Results Reconciled to GAAP

Non-GAAP results described in this filing are financial measures that are not required by or presented in accordance with GAAP. The purpose of the non-GAAP results is to report financial information from the primary operations of our business by excluding the effects of certain income and expenses that do not reflect the ordinary earnings of our operations. The specific items excluded have not been allocated to segments, are described in detail on pages 40–41, and are reconciled to comparable GAAP measures below.

Non-GAAP results adjust the quarterly non-GAAP tax rates so that the non-GAAP tax rate in each of the quarters is equal to the full-year estimated non-GAAP tax rate. The full-year non-GAAP tax rate in both years excludes certain pretax and income tax amounts. Amounts reported for prior periods have been updated in this report to present information consistently for all periods presented.

The Non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. Our management believes these measures are also useful to investors as such measures allow investors to evaluate our performance using the same metrics that our management uses to evaluate past performance and prospects for future performance. We do not consider these items to be reflective of our core operating performance due to the variability of such items from period-to-period in terms of size, nature and significance. Additionally, non-GAAP results are utilized as performance measures in certain management incentive compensation plans.

Non-GAAP results should not be considered as an alternative to revenue, income or earnings per share amounts determined in accordance with GAAP and should be read in conjunction with their GAAP counterparts.

*(In millions, except for percentages)*

| Effective Income Tax Rate(a) | YTD '18 Pre-tax | Tax | Effective tax rate | YTD '17 Pre-tax | Tax | Effective tax rate |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| GAAP | $(52.2) | 30.0 | (57.5)% | $85.8 | 31.7 | 36.9% |
| Retirement plans(d) | 16.9 | 3.9 |  | 15.9 | 5.8 |  |
| Venezuela operations(b) | 0.6 | (3.9) |  | (11.5) | (8.7) |  |
| Reorganization and Restructuring(b) | 8.2 | 2.7 |  | 9.7 | 3.3 |  |
| Acquisitions and dispositions(b) | 19.6 | 9.3 |  | 2.0 | 0.5 |  |
| Tax on accelerated income(e) | — | 0.3 |  | — | — |  |
| Reporting compliance(b) | 1.4 | 0.3 |  | — | — |  |
| Loss on deconsolidation of Venezuela operations(f) | 126.7 | — |  | — | — |  |
| Income tax rate adjustment(c) | — | 2.3 |  | — | 2.2 |  |
| Non-GAAP | $121.2 | 44.9 | 37.0% | $101.9 | 34.8 | 34.2% |

Amounts may not add due to rounding.

(a) From continuing operations.

(b) See “Other Items Not Allocated To Segments” on pages 40–41 for details. We do not consider these items to be reflective of our core operating performance due to the variability of such items from period-to-period in terms of size, nature and significance.

(c) Non-GAAP income from continuing operations and non-GAAP EPS have been adjusted to reflect an effective income tax rate in each interim period equal to the full-year non-GAAP effective income tax rate. The full-year non-GAAP effective tax rate is estimated at 37.0% for 2018 and was 34.2% for 2017.

(d) Our U.S. retirement plans are frozen and costs related to these plans are excluded from non-GAAP results. Certain non-U.S. operations also have retirement plans. Settlement charges related to these non-U.S. plans are also excluded from non-GAAP results.

(e) The non-GAAP tax rate excludes the 2018 foreign tax benefit that resulted from the transaction that accelerated U.S. tax in 2015.

(f) Effective June 30, 2018, we deconsolidated our investment in Venezuelan subsidiaries and recognized a pretax charge of $126.7 million.

(g) Because we reported a loss from continuing operations on a GAAP basis in the second quarter of 2017, GAAP EPS was calculated using basic shares. However, as we reported income from continuing operations on a non-GAAP basis in the second quarter of 2017, non-GAAP EPS was calculated using diluted shares.

### Non-GAAP Results Reconciled to GAAP

*(In millions, except for percentages and per share amounts)*

| Revenues: | Three Months Ended June 30, 2018 | 2017 | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| GAAP | $849.7 | 805.9 | 1,728.8 | 1,594.3 |
| Venezuela operations(b) | (25.6) | (46.3) | (51.4) | (94.4) |
| Non-GAAP | $824.1 | 759.6 | 1,677.4 | 1,499.9 |
| Operating profit: |  |  |  |  |
| GAAP | $61.7 | 48.3 | 126.5 | 119.2 |
| Venezuela operations(b) | 1.2 | 4.5 | (2.3) | (16.6) |
| Reorganization and Restructuring(b) | 4.5 | 5.6 | 8.2 | 9.7 |
| Acquisitions and dispositions(b) | 7.4 | 2.4 | 13.9 | 2.0 |
| Reporting compliance(b) | 1.4 | — | 1.4 | — |
| Non-GAAP | $76.2 | 60.8 | 147.7 | 114.3 |
| Operating margin: |  |  |  |  |
| GAAP margin | 7.3% | 6.0% | 7.3% | 7.5% |
| Non-GAAP margin | 9.2% | 8.0% | 8.8% | 7.6% |
| Interest expense: |  |  |  |  |
| GAAP | $(15.8) | (6.0) | (30.8) | (10.8) |
| Venezuela operations(b) | 0.1 | — | 0.1 | — |
| Acquisitions and dispositions(b) | 0.2 | — | 0.4 | — |
| Non-GAAP | $(15.5) | (6.0) | (30.3) | (10.8) |
| Loss on deconsolidation of Venezuela operations: |  |  |  |  |
| GAAP | $(126.7) | — | (126.7) | — |
| Loss on deconsolidation of Venezuela operations(f) | 126.7 | — | 126.7 | — |
| Non-GAAP | $— | — | — | — |
| Interest and other income (expense): |  |  |  |  |
| GAAP | $(8.1) | (11.4) | (21.2) | (22.6) |
| Retirement plans(d) | 8.1 | 8.6 | 16.9 | 15.9 |
| Venezuela operations(b) | 0.9 | 2.2 | 2.8 | 5.1 |
| Acquisitions and dispositions(b) | 2.4 | — | 5.3 | — |
| Non-GAAP | $3.3 | (0.6) | 3.8 | (1.6) |
| Provision for income taxes: |  |  |  |  |
| GAAP | $18.6 | 17.3 | 30.0 | 31.7 |
| Retirement plans(d) | 2.0 | 3.1 | 3.9 | 5.8 |
| Venezuela operations(b) | (2.4) | (3.8) | (3.9) | (8.7) |
| Reorganization and Restructuring(b) | 1.5 | 1.9 | 2.7 | 3.3 |
| Acquisitions and dispositions(b) | 6.2 | 0.3 | 9.3 | 0.5 |
| Tax on accelerated income(e) | (0.2) | — | 0.3 | — |
| Reporting compliance(b) | 0.3 | — | 0.3 | — |
| Income tax rate adjustment(c) | (2.3) | (0.3) | 2.3 | 2.2 |
| Non-GAAP | $23.7 | 18.5 | 44.9 | 34.8 |
| Net income (loss) attributable to noncontrolling interests: |  |  |  |  |
| GAAP | $0.3 | (0.7) | 3.5 | 5.1 |
| Venezuela operations(b) | 1.6 | 2.2 | 1.0 | (2.7) |
| Reorganization and Restructuring(b) | (0.1) | 0.1 | (0.1) | 0.4 |
| Income tax rate adjustment(c) | (0.1) | — | (0.5) | 0.2 |
| Non-GAAP | $1.7 | 1.6 | 3.9 | 3.0 |

Amounts may not add due to rounding.

See page 47 for footnote explanations.

*(In millions, except for percentages and per share amounts)*

| Income (loss) from continuing operations attributable to Brink's: | Three Months Ended June 30, 2018 | 2017 | Six Months Ended June 30, 2018 | 2017 |
| --- | ---: | ---: | ---: | ---: |
| GAAP | $(107.8) | 14.3 | (85.7) | 49.0 |
| Retirement plans(d) | 6.1 | 5.5 | 13.0 | 10.1 |
| Venezuela operations(b) | 3.0 | 8.3 | 3.5 | (0.1) |
| Reorganization and Restructuring(b) | 3.1 | 3.6 | 5.6 | 6.0 |
| Acquisitions and dispositions(b) | 3.8 | 2.1 | 10.3 | 1.5 |
| Tax on accelerated income(e) | 0.2 | — | (0.3) | — |
| Reporting compliance(b) | 1.1 | — | 1.1 | — |
| Loss on deconsolidation of Venezuela operations(f) | 126.7 | — | 126.7 | — |
| Income tax rate adjustment(c) | 2.4 | 0.3 | (1.8) | (2.4) |
| Non-GAAP | $38.6 | 34.1 | 72.4 | 64.1 |
| Diluted EPS: |  |  |  |  |
| GAAP | $(2.11) | 0.28 | (1.68) | 0.95 |
| Retirement plans(d) | 0.12 | 0.11 | 0.25 | 0.19 |
| Venezuela operations(b) | 0.06 | 0.15 | 0.07 | — |
| Reorganization and Restructuring(b) | 0.06 | 0.07 | 0.11 | 0.12 |
| Acquisitions and dispositions(b) | 0.07 | 0.04 | 0.20 | 0.02 |
| Tax on accelerated income(e) | — | — | (0.01) | — |
| Reporting compliance(b) | 0.02 | — | 0.02 | — |
| Loss on deconsolidation of Venezuela operations(f) | 2.43 | — | 2.43 | — |
| Income tax rate adjustment(c) | 0.05 | 0.01 | (0.04) | (0.05) |
| Share adjustment(g) | 0.04 | — | 0.04 | — |
| Non-GAAP | $0.74 | 0.66 | 1.39 | 1.24 |

Amounts may not add due to rounding.

See page 47 for footnote explanations.

### LIQUIDITY AND CAPITAL RESOURCES

### Overview

Cash flows from operating activities decreased by $15.6 million in the first six months of 2018 as compared to the first six months of 2017. Cash used for investing activities decreased by $40.1 million in the first six months of 2018 compared to the first six months of 2017. We financed our liquidity needs in the first six months of 2018 with cash flows from short term borrowings.

### Operating Activities

*(In millions)*

| Cash flows from operating activities | Six Months Ended June 30, 2018 | 2017 | $ change |
| --- | ---: | ---: | ---: |
| Operating activities - GAAP | $109.1 | 124.7 | (15.6) |
| Venezuela operations | (0.4) | (15.1) | 14.7 |
| (Increase) decrease in restricted cash held for customers | (4.4) | (23.4) | 19.0 |
| (Increase) decrease in certain customer obligations(a) | (5.7) | (7.1) | 1.4 |
| Discontinued operations | — | (0.6) | 0.6 |
| Operating activities - non-GAAP | $98.6 | 78.5 | 20.1 |

(a) To adjust for the change in the balance of customer obligations related to cash received and processed in certain of our secure Cash Management Services operations. The title to this cash transfers to us for a short period of time. The cash is generally credited to customers’ accounts the following day and we do not consider it as available for general corporate purposes in the management of our liquidity and capital resources.

Non-GAAP cash flows from operating activities is a supplemental financial measure that is not required by, or presented in accordance with, GAAP. The purpose of this non-GAAP measure is to report financial information excluding cash flows from Venezuela operations, restricted cash held for customers, the impact of cash received and processed in certain of our Cash Management Services operations, and without cash flows from discontinued operations. We believe this measure is helpful in assessing cash flows from operations, enables period-to-period comparability and is useful in predicting future operating cash flows. This non-GAAP measure should not be considered as an alternative to cash flows from operating activities determined in accordance with GAAP and should be read in conjunction with our condensed consolidated statements of cash flows.

### GAAP

Cash flows from operating activities decreased by $15.6 million in the first six months of 2018 compared to the same period in 2017. The decrease was primarily due to the $19.0 million decrease in restricted cash held for customers, decrease in operating cash provided by Venezuela operations of $14.7 million and higher amounts paid for interest, partially offset by changes in working capital.

### Non-GAAP

Non-GAAP cash flows from operating activities increased by $20.1 million in the first six months of 2018 as compared to the same period in 2017. The increase was primarily due to changes in working capital.

### Investing Activities

*(In millions)*

| Cash flows from investing activities | Six Months Ended June 30, 2018 | 2017 | $ change |
| --- | ---: | ---: | ---: |
| Capital expenditures | $(73.3) | (71.1) | (2.2) |
| Acquisitions, net of cash acquired | — | (65.0) | 65.0 |
| Dispositions, net of cash disposed | 9.6 | 1.1 | 8.5 |
| Marketable securities: |  |  |  |
| Purchases | (50.1) | (19.3) | (30.8) |
| Sales | 5.5 | 5.4 | 0.1 |
| Proceeds from sale of property and equipment | 1.8 | 1.4 | 0.4 |
| Other | (0.9) | — | (0.9) |
| Investing activities | $(107.4) | (147.5) | 40.1 |

Cash used by investing activities decreased by $40.1 million in the first six months of 2018 versus the first six months of 2017. The decrease was primarily due to the $65 million in cash paid, net of cash acquired, for the three business acquisitions in Brazil, Chile and the U.S. in the first six months of 2017 along with the cash received from the disposition of our former French airport security services subsidiary in 2018, partially offset by higher purchases of marketable securities ($30.8 million) during the first six months of 2018.

Cash used by investing activities is expected to increase in the future quarters of 2018 as cash payments are made for pending business acquisitions in the U.S. and Brazil. We expect to fund these acquisitions largely through the use of available cash and cash equivalents.

Capital expenditures and depreciation and amortization were as follows:

*(In millions)*

| Property and equipment acquired during the period Capital expenditures:(a) | Six Months Ended June 30, 2018 | 2017 | $Full Year change | 2017 |
| --- | ---: | ---: | ---: | ---: |
| North America | $30.3 | 39.0 | (8.7) | 86.3 |
| South America | 22.4 | 15.3 | 7.1 | 39.2 |
| Rest of World | 13.4 | 10.1 | 3.3 | 35.9 |
| Corporate | 7.2 | 5.5 | 1.7 | 8.9 |
| Capital expenditures - non-GAAP | 73.3 | 69.9 | 3.4 | 170.3 |
| Venezuela | — | 1.2 | (1.2) | 4.2 |
| Capital expenditures - GAAP | $73.3 | 71.1 | 2.2 | 174.5 |
| Capital leases:(b) |  |  |  |  |
| North America | $21.9 | 19.7 | 2.2 | 47.3 |
| South America | 5.6 | 3.3 | 2.3 | 4.4 |
| Capital leases - GAAP and non-GAAP | $27.5 | 23.0 | 4.5 | 51.7 |
| Total: |  |  |  |  |
| North America | $52.2 | 58.7 | (6.5) | 133.6 |
| South America | 28.0 | 18.6 | 9.4 | 43.6 |
| Rest of World | 13.4 | 10.1 | 3.3 | 35.9 |
| Corporate | 7.2 | 5.5 | 1.7 | 8.9 |
| Total property and equipment acquired excluding Venezuela | 100.8 | 92.9 | 7.9 | 222.0 |
| Venezuela | — | 1.2 | (1.2) | 4.2 |
| Total property and equipment acquired | $100.8 | 94.1 | 6.7 | 226.2 |
| **Depreciation and amortization(a)** |  |  |  |  |
| North America | $32.3 | 33.6 | (1.3) | 68.4 |
| South America | 13.5 | 10.6 | 2.9 | 23.5 |
| Rest of World | 16.1 | 14.6 | 1.5 | 30.4 |
| Corporate | 6.3 | 5.7 | 0.6 | 12.0 |
| Depreciation and amortization - non-GAAP | 68.2 | 64.5 | 3.7 | 134.3 |
| Venezuela | 1.1 | 0.8 | 0.3 | 1.7 |
| Reorganization and Restructuring | 1.4 | 1.5 | (0.1) | 2.2 |
| Amortization of intangible assets | 7.2 | 1.7 | 5.5 | 8.4 |
| Depreciation and amortization - GAAP | $77.9 | 68.5 | 9.4 | 146.6 |

(a) Capital expenditures as well as depreciation and amortization related to Venezuela have been excluded from South America. In addition, accelerated depreciation related to Reorganization and Restructuring activities and amortization of acquisition-related intangible assets have also been excluded from non-GAAP amounts.

(b) Represents the amount of property and equipment acquired using capital leases. Because the assets are acquired without using cash, the acquisitions are not reflected in the condensed consolidated cash flow statement. Amounts are provided here to assist in the comparison of assets acquired in the current year versus prior years. Sale leaseback transactions are excluded from "Capital leases" in this table.

Non-GAAP capital expenditures and non-GAAP depreciation and amortization are supplemental financial measures that are not required by, or presented in accordance with GAAP. The purpose of these non-GAAP measures is to report financial information excluding capital expenditures and depreciation and amortization from our Venezuela operations, accelerated depreciation from restructuring activities and amortization of acquisition-related intangible assets. We believe these measures are helpful in assessing capital expenditures and depreciation and amortization, enable period-to-period comparability and are useful in predicting future investing cash flows. These non-GAAP measures should not be considered as alternatives to capital expenditures and depreciation and amortization determined in accordance with GAAP and should be read in conjunction with our condensed consolidated statements of cash flows.

Our reinvestment ratio, which we define as the annual amount of property and equipment acquired during the period divided by the annual amount of depreciation, was 1.7 for the twelve months ending June 30, 2018 compared to 1.4 for the twelve months ending June 30, 2017.

Capital expenditures in the first six months of 2018 were primarily for machinery and equipment, armored vehicles and information technology.

### Financing Activities

*(In millions)*

| Cash flows from financing activities Borrowings and repayments: | Six Months Ended June 30, 2018 | 2017 | $ change |
| --- | ---: | ---: | ---: |
| Short-term borrowings | $10.5 | 5.5 | 5.0 |
| Cash supply chain customer debt | (11.7) | 1.8 | (13.5) |
| Long-term revolving credit facilities, net | — | 107.4 | (107.4) |
| Other long-term debt, net | (25.9) | (15.2) | (10.7) |
| Borrowings (repayments) | (27.1) | 99.5 | (126.6) |
| Dividends to: |  |  |  |
| Shareholders of Brink’s | (15.2) | (12.6) | (2.6) |
| Noncontrolling interests in subsidiaries | (1.9) | (2.6) | 0.7 |
| Proceeds from exercise of stock options | 0.8 | 2.6 | (1.8) |
| Tax withholdings associated with share-based compensation | (11.3) | (8.9) | (2.4) |
| Other | 0.2 | 1.0 | (0.8) |
| Financing activities | $(54.5) | 79.0 | (133.5) |

### Debt borrowings and repayments

Cash flows from financing activities decreased by $133.5 million in the first six months of 2018 compared to the first six months of 2017 as net borrowings decreased compared to the prior year period.

### Dividends

We paid dividends to Brink’s shareholders of $0.30 per share or $15.2 million in the first six months of 2018 compared to $0.25 per share or $12.6 million in the first six months of 2017. Future dividends are dependent on our earnings, financial condition, shareholders’ equity levels, our cash flow and business requirements, as determined by the Board of Directors.

### Reconciliation of Net Debt to U.S. GAAP Measures

*(In millions)*

| Debt: | June 30, 2018 | December 31, 2017 |
| --- | ---: | ---: |
| Short-term borrowings | $41.4 | 45.2 |
| Long-term debt | 1,187.2 | 1,191.5 |
| Total Debt | 1,228.6 | 1,236.7 |
| Restricted cash borrowings(a) | (14.6) | (27.0) |
| Total Debt without restricted cash borrowings | 1,214.0 | 1,209.7 |
| Less: |  |  |
| Cash and cash equivalents | 548.5 | 614.3 |
| Amounts held by Cash Management Services operations(b) | (21.3) | (16.1) |
| Cash and cash equivalents available for general corporate purposes | 527.2 | 598.2 |
| Net Debt | $686.8 | 611.5 |

(a) Restricted cash borrowings are related to cash borrowed under lending arrangements used in the process of managing customer cash supply chains, which is currently classified as restricted cash and not available for general corporate purposes.

(b) Title to cash received and processed in certain of our secure Cash Management Services operations transfers to us for a short period of time. The cash is generally credited to customers’ accounts the following day and we do not consider it as available for general corporate purposes in the management of our liquidity and capital resources and in our computation of Net Debt.

Net Debt is a supplemental non-GAAP financial measure that is not required by, or presented in accordance with GAAP. We use Net Debt as a measure of our financial leverage. We believe that investors also may find Net Debt to be helpful in evaluating our financial leverage. Net Debt should not be considered as an alternative to Debt determined in accordance with GAAP and should be reviewed in conjunction with our condensed consolidated balance sheets. Set forth above is a reconciliation of Net Debt, a non-GAAP financial measure, to Debt, which is the most directly comparable financial measure calculated and reported in accordance with GAAP, as of June 30, 2018, and December 31, 2017. Net Debt excluding cash and debt in Venezuelan operations was $615 million at December 31, 2017.

Net Debt increased by $75 million primarily to fund business acquisitions and other working capital needs including insurance and bonus payments.

### Liquidity Needs

Our operating liquidity needs are typically financed by cash from operations, short-term debt and the available borrowing capacity under our Revolving Credit Facility (our debt facilities are described in more detail in Note 9 to the condensed consolidated financial statements, including certain limitations and considerations related to the cash and borrowing capacity). As of June 30, 2018, $1 billion was available under the Revolving Credit Facility. Based on our current cash on hand, amounts available under our credit facilities and current projections of cash flows from operations, we believe that we will be able to meet our liquidity needs for more than the next twelve months.

*Limitations on dividends from foreign subsidiaries.* A significant portion of our operations are outside the U.S. which may make it difficult or costly to repatriate cash for use in the U.S. See “Risk Factors” in Item 1A of our annual report on Form 10-K for the year ended December 31, 2017, for more information on the risks associated with having businesses outside the U.S.

### Equity

At June 30, 2018, we had 100 million shares of common stock authorized and approximately 51.0 million shares issued and outstanding.

In May 2017, our board of directors authorized a $200 million share repurchase program, which expires on December 31, 2019. We are not obligated to repurchase any specific dollar amount or number of shares and, at June 30, 2018, $200 million remains available under this program. The timing and volume of share repurchases may be executed at the discretion of management on an opportunistic basis, or pursuant to trading plans or other arrangements. Share repurchases under the program may be made in the open market, in privately negotiated transactions, or otherwise.

### U.S. Retirement Liabilities

*Funded Status of U.S. Retirement Plans*

*(In millions)*

| Primary U.S. pension plan | Actual 2017 | Actual First Half 2018 | Projected 2nd Half 2018 | 2019 | 2020 | 2021 | 2022 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Beginning funded status | $(107.8) | (102.3) | (91.3) | (79.3) | (55.4) | (30.5) | (4.5) |
| Net periodic pension credit(a) | 18.5 | 11.0 | 11.0 | 22.9 | 23.5 | 25.4 | 27.2 |
| Payment from Brink’s | — | — | — | — | — | — | — |
| Benefit plan experience loss | (13.0) | — | 1.0 | 1.0 | 1.4 | 0.6 | — |
| Ending funded status | $(102.3) | (91.3) | (79.3) | (55.4) | (30.5) | (4.5) | 22.7 |
| **UMWA plans** |  |  |  |  |  |  |  |
| Beginning funded status | $(226.6) | (294.3) | (294.1) | (294.7) | (296.8) | (299.8) | (303.8) |
| Net periodic postretirement cost(a) | (1.9) | (0.3) | (0.1) | (2.1) | (3.0) | (4.0) | (5.2) |
| Benefit plan experience loss | (66.3) | — | — | — | — | — | — |
| Other | 0.5 | 0.5 | (0.5) | — | — | — | — |
| Ending funded status | $(294.3) | (294.1) | (294.7) | (296.8) | (299.8) | (303.8) | (309.0) |
| **Black lung plans** |  |  |  |  |  |  |  |
| Beginning funded status | $(57.2) | (67.0) | (63.9) | (62.4) | (57.8) | (53.5) | (49.5) |
| Net periodic postretirement cost(a) | (2.4) | (1.2) | (1.3) | (2.0) | (1.9) | (1.8) | (1.6) |
| Payment from Brink’s | 7.3 | 4.3 | 2.8 | 6.6 | 6.2 | 5.8 | 5.4 |
| Benefit plan experience loss | (14.7) | — | — | — | — | — | — |
| Ending funded status | $(67.0) | (63.9) | (62.4) | (57.8) | (53.5) | (49.5) | (45.7) |

(a) Excludes amounts reclassified from accumulated other comprehensive income (loss).

### Primary U.S. Pension Plan

Pension benefits provided to eligible U.S. employees were frozen on December 31, 2005, and are not provided to employees hired after 2005 or to those covered by a collective bargaining agreement. We did not make cash contributions to the primary U.S. pension plan in 2017 or the first six months of 2018. There are approximately 14,200 beneficiaries in the plans.

Based on assumptions found in our Annual Report on Form 10-K for the year ended December 31, 2017, we do not expect to make any additional contributions.

### UMWA Plans

Retirement benefits related to former coal operations include medical benefits provided by the Pittston Coal Group Companies Employee Benefit Plan for UMWA Represented Employees. There are approximately 3,300 beneficiaries in the UMWA plans. The company does not expect to make additional contributions to these plans until 2027 based on actuarial assumptions.

### Black Lung

Under the Federal Black Lung Benefits Act of 1972, Brink’s is responsible for paying lifetime black lung benefits to miners and their dependents for claims filed and approved after June 30, 1973. There are approximately 760 black lung beneficiaries.

### Assumptions for U.S. Retirement Obligations

We have made various assumptions to estimate the amount of payments to be made in the future. The most significant assumptions include:

- Discount rates and other assumptions in effect at measurement dates (normally December 31)
- Investment returns of plan assets
- Addition of new participants (historically immaterial due to freezing of pension benefits and exit from coal business)
- Mortality rates
- Change in laws

The assumptions used to estimate our U.S. retirement obligations can be found in our Annual Report on Form 10-K for the year ended December 31, 2017.

### Summary of Expenses Related to All U.S. Retirement Liabilities through 2022

This table summarizes actual and projected expense related to U.S. retirement liabilities.

*(In millions)*

|  | Actual 2017 | Actual First Half 2018 | Projected 2nd Half 2018 | FY2018 | 2019 | 2020 | 2021 | 2022 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Primary U.S. pension plan | $7.7 | 2.9 | 2.6 | 5.5 | 2.6 | (0.3) | (5.9) | (10.9) |
| UMWA plans | 16.8 | 8.5 | 7.6 | 16.1 | 18.3 | 18.3 | 18.4 | 18.6 |
| Black lung plans | 8.4 | 4.7 | 5.1 | 9.8 | 6.2 | 5.8 | 5.4 | 4.9 |
| Total | $32.9 | 16.1 | 15.3 | 31.4 | 27.1 | 23.8 | 17.9 | 12.6 |

### Summary of Payments from Brink’s to U.S. Plans and Payments from U.S. Plans to Participants through 2022

This table summarizes actual and projected payments:

- from Brink’s to U.S. retirement plans, and
- from the plans to participants.

*(In millions)*

| Payments from Brink’s to U.S. Plans | Actual 2017 | Actual First Half 2018 | Projected 2nd Half 2018 | FY2018 | 2019 | 2020 | 2021 | 2022 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Black lung plans | $7.3 | 4.3 | 2.8 | 7.1 | 6.6 | 6.2 | 5.8 | 5.4 |
| Total | $7.3 | 4.3 | 2.8 | 7.1 | 6.6 | 6.2 | 5.8 | 5.4 |
| **Payments from U.S. Plans to participants** |  |  |  |  |  |  |  |  |
| Primary U.S. pension plan | $49.1 | 24.3 | 26.0 | 50.3 | 50.6 | 50.8 | 50.9 | 50.8 |
| UMWA plans | 33.5 | 13.1 | 21.1 | 34.2 | 34.0 | 34.4 | 34.3 | 33.6 |
| Black lung plans | 7.3 | 4.3 | 2.8 | 7.1 | 6.6 | 6.2 | 5.8 | 5.4 |
| Total | $89.9 | 41.7 | 49.9 | 91.6 | 91.2 | 91.4 | 91.0 | 89.8 |

The amounts in the tables above are based on a variety of estimates, including actuarial assumptions as of the most recent measurement date. The estimated amounts will change in the future to reflect payments made, investment returns, actuarial revaluations, and other changes in estimates. Actual amounts could differ materially from the estimated amounts.

### Contingent Matters

See Note 13 to the condensed consolidated financial statements for information about contingent matters at June 30, 2018.

## Market risk

As filed, 782 characters.

We serve customers in more than 100 countries, including 41 countries where we operate subsidiaries. These operations expose us to a variety of market risks, including the effects of changes in interest rates and foreign currency exchange rates. In addition, we consume various commodities in the normal course of business, exposing us to the effects of changes in the prices of such commodities. These financial and commodity exposures are monitored and managed by us as an integral part of our overall risk management program. Our risk management program seeks to reduce the potentially adverse effects that the volatility of certain markets may have on our operating results. We have not had any material change in our market risk exposures in the six months ended June 30, 2018.

## Controls and procedures

As filed, 6,330 characters.

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”), who is our principal executive officer, and our Executive Vice President and Chief Financial Officer (“CFO”), who is our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. As a result of this evaluation, our CEO and CFO concluded that the material weaknesses previously identified in Item 9A. “Controls and Procedures” of our Annual Report on Form 10-K for the year ended December 31, 2017 were still present as of June 30, 2018. Based on those material weaknesses, and the evaluation of our disclosure controls and procedures, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of June 30, 2018.

Notwithstanding the material weaknesses in our internal control over financial reporting, we have concluded that the condensed consolidated financial statements included in this Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.

#### Changes in internal control over financial reporting.

There has been no change in our internal control over financial reporting during the quarter ended June 30, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

### Forward-looking information

This document contains both historical and forward-looking information. Words such as “anticipates,” “assumes,” “estimates,” “expects,” “projects,” “predicts,” “intends,” “plans,” “potential,” “believes,” “could,” “may,” “should” and similar expressions may identify forward-looking information. Forward-looking information in this document includes, but is not limited to, statements concerning: segment operating profit margin outlook; potential effects of currency rate changes; anticipated costs of our Reorganization and Restructuring activities; the use of cash to fund business acquisitions; realization of deferred tax assets; our effective tax rate and future tax payments; the ability to meet liquidity needs; expenses and payouts for the U.S. retirement plans and the non-U.S. pension plans and the funded status of the primary pension plan; expected liability for and future contributions to the UMWA plans; and liability for black lung obligations. Forward-looking information in this document is subject to known and unknown risks, uncertainties, and contingencies, which are difficult to quantify and which could cause actual results, performance or achievements to differ materially from those that are anticipated.

These risks, uncertainties and contingencies, many of which are beyond our control, include, but are not limited to:

- our ability to improve profitability and execute further cost and operational improvements and efficiencies in our core businesses;
- our ability to improve service levels and quality in our core businesses;
- market volatility and commodity price fluctuations;
- seasonality, pricing and other competitive industry factors;
- investment in information technology and its impact on revenue and profit growth;
- our ability to maintain an effective IT infrastructure and safeguard confidential information;
- our ability to effectively develop and implement solutions for our customers;
- risks associated with operating in foreign countries, including changing political, labor and economic conditions, regulatory issues, currency restrictions and devaluations, restrictions on and cost of repatriating earnings and capital, impact on the Company's financial results as a result of jurisdictions determined to be highly inflationary, and restrictive government actions, including nationalization;
- labor issues, including negotiations with organized labor and work stoppages;
- the strength of the U.S. dollar relative to foreign currencies and foreign currency exchange rates;
- our ability to identify, evaluate and complete acquisitions and other strategic transactions and to successfully integrate acquired companies;
- costs related to dispositions and market exits;
- our ability to obtain appropriate insurance coverage, positions taken by insurers relative to claims and the financial condition of insurers;
- safety and security performance and loss experience;
- employee, environmental and other liabilities in connection with former coal operations, including black lung claims;
- the impact of the Patient Protection and Affordable Care Act on legacy liabilities and ongoing operations;
- funding requirements, accounting treatment, and investment performance of our pension plans, the VEBA and other employee benefits;
- changes to estimated liabilities and assets in actuarial assumptions;
- the nature of hedging relationships and counterparty risk;
- access to the capital and credit markets;
- our ability to realize deferred tax assets;
- the outcome of pending and future claims, litigation, and administrative proceedings;
- public perception of our business, reputation and brand;
- changes in estimates and assumptions underlying our critical accounting policies; and
- the promulgation and adoption of new accounting standards, new government regulations and interpretation of existing standards and regulations.

This list of risks, uncertainties and contingencies is not intended to be exhaustive. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the period ended December 31, 2017 and in our other public filings with the Securities and Exchange Commission. The forward looking information included in this document is representative only as of the date of this document, and The Brink’s Company undertakes no obligation to update any information contained in this document.

Filed Jul 25, 2018.
Source: SEC EDGAR, the filing index for accession 0000078890-18-000033. Last ingested by Listed: Nov 4, 2026, 07:32 ET. No prices; not investment advice.